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Reviewing Democrats’ No-Fault Reform Bills: Transparency

On May 1, 2014, members of the House Democratic Caucus announced a pack of 14 bills that they believe will reform Michigan No-Fault Insurance by increasing transparency, making insurers subject to consumer protection statutes, and controlling rates. Not all the bills have been released yet, but HB 4543 and HB 4551 introduced in April 2013, if passed, could greatly improve public access to regulatory decisions around the automobile insurance industry.

House Bill No. 4543 would amend the state’s Open Meetings Act to include the Michigan Catastrophic Claims Association (MCCA). The MCCA is a public non-profit entity that reimburses No-Fault insurers for claims costing more than a set amount ($530,000 for 2014). To cover those costs, insurance companies are required to pay assessments which they generally pass to their customers. According to the MCCA website, the 2013-2014 assessment is $186.00 per vehicle.

By making the MCCA subject to the Open Meetings Act, the bill would require the association to hold meetings that are open to the public who are allowed to record or broadcast the events. Individuals would be allowed to attend anonymously and could not be excluded unless they were being disruptive. Under the bill, no decisions could be made by the association except in an open session.

House Bill No. 4551 is similar – it adds the MCCA to the list of entities answerable to the public. Under this bill, any documents provided to or in possession of the MCCA could be requested under the Freedom of Information Act. The association would also be subject to an annual audit by an independent CPA. The bill would also give the Commissioner of the MCCA the power to veto the annual assessment if it is found to be excessive. These three changes would make the Commissioner and the MCCA more accountable to the public, because their work will be subject to inspection under the bill.

HB 4543 and HB 4551 are the first of 14 bills the Democrats believe will reform the Michigan No-Fault statutes to benefit consumers. Both focus on improving the transparency and accountability of the MCCA. If you believe the insurance company should be more closely regulated, contact your state representative and tell him or her to support these bills.